...the Tea Act, which allowed the East India Company to sell tea to the colonies directly and without "payment of any customs or duties whatsoever" in Britain, instead paying the much lower American duty. This tax break allowed the East India Company to sell tea for half the old price and cheaper than the price of tea in England, enabling them to undercut the prices offered by the colonial merchants and smugglers.

Essentially, the East India Company was selling tea for less than the American smugglers and merchants, who, angered by having their prices undercut, protested and finally had the tea thrown into the harbor and destroyed.